TheChek News Flow

>>> Up

* Aurelius Upgraded to Buy at Oddo BHF; PT 54 Euros

* Euronext Upgraded to Outperform at KBW; PT 63 Euros

* Raysearch Upgraded to Hold at Carnegie; PT 130 Kronor

>>> Down

* Ambu Downgraded to Sell at Carnegie; PT 200 Kroner

* Deutsche Rohstoff Cut to Add at First Berlin; PT 24.70 Euros

* Fugro GDRs Downgraded to Reduce at AlphaValue

* SAS Downgraded to Neutral at SpareBank; PT 17 Kronor

>>> Initiation

* Adyen Reinstated at William O'Neil & Co Incorporated With Buy

The S&P 500 advanced 0.6% this week, closing Friday at a new record high for the first time since January 26. Political uncertainty, trade ambiguity, and strengthened expectations for two more rate hikes this year all failed to dissuade motivated buyers, who pushed stocks higher in three of the week's five sessions.

As for the other major averages, the Nasdaq and the Russell 2000 also notched new records, adding 1.7% and 1.9%, respectively, while the Dow climbed 0.5%.

The week started on a mildly positive note, with stocks ticking higher on Monday and Tuesday, but investors were cautious over the next two sessions, largely due to the legal woes of President Trump's former campaign manager, Paul Manafort, and longtime personal lawyer, Michael Cohen.

Moving on to the trade front, two days of trade talks between the U.S. and China wrapped up on Thursday without any visible sign of progress. President Trump said beforehand that he wasn't expecting much to come out of the talks, which marked the first official negotiations since a breakdown nearly three months ago.

In monetary policy, President Trump reiterated his displeasure with the Fed on Monday, saying he was "not thrilled" with Fed Chair Jerome Powell for raising rates.

Two days later, the Fed released the minutes from the July/August FOMC meeting, which only strengthened the expectation that the U.S. central bank will hike rates at its September meeting, with officials saying in the minutes that it would likely "soon" be appropriate to raise rates.

Then, on Friday, Fed Chairman Powell gave a speech at the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, saying that gradual rate hikes remain appropriate. Mr. Powell also expressed confidence in the economy and said he doesn't see any signs of inflation getting out of hand.

Meanwhile, the consumer discretionary sector (+2.0%) also outperformed amid a steady flow of retail earnings. TJX (TJX) jumped 4.7% on Tuesday after reporting better-than-expected results, while Lowe's (LOW) and Target (TGT) added 5.8% and 3.2%, respectively, on Wednesday after also beating estimates.

On the downside, the four declining sectors were consumer staples (-1.8%), utilities (-1.4%), telecom services (-0.7%), and real estate (-1.1%).

Macro :

- U.S., Mexico Said to Near Pact on Issues Hindering Nafta: WSJ

- Big Oil’s Exit Turns Into Revival for Norway’s Aging North Sea

- Yield Curve Plows Toward Inversion in Face of Questions at Fed

- Firestar ‘Directly Involved’ in Billion-Dollar Fraud: Examiner

Keep an eye on :

- ATC NA : Relvas Seeks Possible Buyers for Altice Portugal Unit: Expresso

- BAYN GY : Bayer, J&J’s Xarelto Fails ‘Mariner’ Trial of High-Risk Patients

- CRG IM : Carige Investors Mincione, Volpi Team Up on Board List: Corriere

- CARLB DC : Carlsberg Brewing Better Profits, Stronger Stock Price- Barrons- http://bit.ly/2wajyIK

- DAI GY : Daimler to Produce Mercedes Trucks in China: Automobilwoche

- DVMT US : Paul Singer’s Hedge Fund Lobbies Against Dell’s $22B Deal: NYP

- DIA SM : LetterOne’s Fridman Seeks Support for DIA Takeover: Expansion

- DIS US : Walt Disney World Reaches Pact With Workers for Min Wage: CNN

- INW IM : F2i Won’t Sell Ei Towers Mobile Antennas to Inwit: CEO to Sole

- IGY GY : RWE Plans to Submit EON/Innogy Deal for Approval in 4Q: BZ

- LHA GY : Pratt Engines Delay Lufthansa; Boeing Cars: Industrials Wrap

- MRO LN : Melrose Is Said to Sell GKN Powder Metallurgy Unit: Telegraph

- B4B GY : Haniel Sells 7.3% of Metro to EP Global Commerce

- NAS NO : Agrees to sell six 737-800 aircraft as part of fleet renewal program - Proceeds of sale to be used to repay debt and increase overall liquidity

- NETS US : Netshoes Is Said Working With Goldman to Find Partner: Rtrs

- NOVN SW : Novartis’ Entresto Meets Endpoints in Heart-Failure Trial

- NOVOB DC : Novo’s Ozempic Reduced Risk of Major Events in Analysis

- ORA FP : Orange to Stop Fixed Phone Line Service in 2023: Parisien

- PZZA US : Papa John’s Says Investigation of Inclusion Practices Underway

- TEL NO : PPF Doesn’t Plan to Flip Telenor Assets Bought This Yr: Novosti

- TIT IM : TIM Participacoes Confirms COO Labriola to Leave Co. Sept. 30

- TSLA US : Elon Musk Says Tesla Will Remain a Public Company - WSJ - https://on.wsj.com/2Nir3UP

Struggling infrastructure projects are leading to a debt crisis

Leaders from across Africa will gather in Beijing next week for the Forum on China Africa Co-operation. This triennial summit is where China makes the headline-grabbing aid and finance commitments that underpin its role as Africa’s most important economic partner, fostering new political and military co-operation in a region often ignored by western governments.

Nearly a decade ago, China surpassed the US to become Africa’s largest trading partner. Last year, its two-way trade hit $170bn — four times larger than US-Africa commerce.

But after more than a decade of vaulting growth in trade, finance and investment, China’s weighty engagement is jeopardising future development prospects in Africa.

The continent holds a special place in the story of China’s modern rise. Before launching its Belt and Road Initiative, the plan to develop trade and infrastructure links across Eurasia, China was building hydropower dams in Sudan and new railways in Nigeria and Ethiopia. And it was in the tiny but geostrategic country of Djibouti on the Red Sea that Beijing established its first overseas military base.

Beijing’s plans for Africa do not stop there. President Xi Jinping is keen for China to serve as an economic and political model for the developing world. He hopes that China’s infrastructure finance and manufacturing investment in Africa will spur industrialisation and development.

But to be productive and contribute to economic development, infrastructure needs to be high-quality and high-performing. And the evidence shows that China’s infrastructure-driven economic model has been far from efficient and is one to avoid rather than emulate. Over half of China’s infrastructure projects are under-performing, damaging rather than fuelling growth and leaving an enormous debt burden for the domestic economy.

These same risks are now manifesting themselves in Africa. Take the standard gauge railway in Kenya, built and financed by China. Completed last year to connect Nairobi, the capital, with the port city of Mombasa, the railway was grossly overpriced at $3.2bn. Instead of refurbishing the existing line, a far cheaper option, Kenya paid China three times more than the industry standard.

Struggling infrastructure projects like this have intensified a rising debt problem for large and small African economies alike. Now it is hoped investment from China will generate the necessary jobs and revenues for countries to avoid infrastructure-induced debt crises.

But, beyond pockets of growth, the prospects are slim that Africa will capture a large amount of new manufacturing investment and labour. The majority of Chinese manufacturers are, in fact, staying at home and taking advantage of the growing cost effectiveness of automation. And those that do venture abroad regularly choose south and south-east Asia over Africa.

Africans are not blind to the dangers that lie in Chinese engagement on the continent. Political elites and boutique consultancies may be cashing in. However, influential voices, such as Nigeria’s former finance minister Ngozi Okonjo-Iweala, have cautioned against following China’s state-led growth model, arguing it can feed corruption.

Africa needs to better leverage its position with Chinese and other foreign investors. It can group together the growing markets of its regional blocs, such as the East African Community, to negotiate more rewarding trade and financial deals.

African leaders can also exploit the geopolitical symbolism Beijing attaches to its engagement there to extract meaningful technology transfers to improve the competitiveness of domestic firms.

The fanfare of next week’s forum is likely to be shortlived. The China model is failing Africa. In the coming years, it will become increasingly difficult for African leaders to ignore the lacklustre results on the ground. They must now re-evaluate their relationship with China and, instead of living out Mr Xi’s dreams for the Chinese model, carve out their own development path.

Pausing missile testing could be a natural exchange for a reprieve in US sanctions

Tensions continue to rise between Iran and the US. Last week, John Bolton, the US national security adviser, warned that Donald Trump’s administration planned to impose “maximum pressure” on Iran. Even the Iranian president, Hassan Rouhani, who is known to favour engagement with the west, has emphasised that his country would increase its military readiness, unveiling a new fighter jet.

Tehran is understandably furious with the US president for withdrawing from the 2015 nuclear deal despite any evidence of Iranian cheating. Supreme leader Ayatollah Ali Khamenei has said he regrets negotiating with the US. But threats and escalation will not serve Iran well. A better approach would be to consider Mr Trump’s offer (via tweet) to meet Mr Rouhani, any time and without conditions. The Iranians should put aside their distrust — they have nothing to lose and it is possible that a new “pause-for-pause” agreement could benefit both sides.

Why is Mr Trump dangling the prospect of talks without any conditions after trashing the nuclear agreement and surrounding himself with hardliners such as Mr Bolton, who have long advocated regime change in Iran? Perhaps the president wants to compensate for his lack of progress with North Korea, which continues to develop a nuclear weapons programme despite Mr Trump’s claims of diplomatic success there. Perhaps Mr Trump simply wants to be unpredictable. Or maybe he believes he can negotiate a better deal with Iran than former president Barack Obama did — a highly unlikely scenario.

Whatever Mr Trump’s reasons, Iran should agree to talk. Its economy is in tatters. Its currency is at record lows and there are rolling protests throughout the country, as international companies leave following the imposition of US sanctions. Iran continues to look to Europe to save the nuclear deal and, with it, the economy. But the EU has not taken the necessary steps to keep international businesses in Iran. Tehran may not like it, but a new understanding with the US would shore up the economy.

There is almost no chance that Mr Trump will reverse his decision to withdraw from the 2015 agreement, or that a comprehensive new deal is on the cards. But there is a possible arrangement that would leave both sides better off and allow everyone to save face.

Mr Trump could instruct his Treasury department to issue individual waivers to international companies, allowing them to do business in Iran without running foul of US law. But, in exchange, Iran would need to give him something he could claim as a win. Tehran has already shut down its nuclear programme so there is not much more to give there. But Iran has not launched a medium nor long-range ballistic missile in more than a year. This is significant, given how much Iran values its missile programme — Tehran refused to discuss ballistic missiles in negotiations with the Obama administration and, after the 2015 deal was signed, it conducted at least 23 provocative missile tests. Then they quietly stopped.

It may be that Iran halted testing to keep international tension from escalating while the nuclear deal hung in the balance. Now it is beginning to resume the programme, reportedly with a short-range missile test this month. Pausing the launching of its medium and long-range missiles could be a natural exchange for a pause in sanctions enforcement.

Such an understanding would allow Iran and other countries to uphold the nuclear deal, even without US participation. It would also allow Mr Trump to declare a victory in curbing one of Iran’s more provocative regional irritants. And it would give Iranian leaders some breathing room. They may prefer to ignore Mr Trump’s offer, but it is in their interest to come to the table.

The long-running US and Russian proxy war in Syria has been largely forgotten of late, but suddenly snapped back into international headlines with John Bolton's warning Assad and Russia this week that Washington will respond with "greater military force" should claims of a Syrian government chemical attack emerge in Idlib.

In response, Russia subsequently warned of a staged "chemical provocation" coming and it appears a war of words is yet again ratcheting up over Syria, which has the very real potential of turning into an actual war.

It fits a familiar pattern on Syria since Russian intervention at the invitation of President Bashar al-Assad in 2015: just when it appears the jihadists are on the brink of final defeat, and as stability is returning after seven years of grinding war, something happens to bring things right back to the brink of global crisis and escalation.

And now, a senior Russian lawmaker in the Federal Assembly (Duma) has called on his government to draw its own "red lines" while suggesting the use of tactical nuclear weapons against United States forces in Syria.

The Russian official news agency TASS reports Vladimir Gutenev's shocking words spoken on Friday. Gutenev is the first deputy head of the economic policy committee of the State Duma, the lower chamber of the Russian parliament.

Gutenev said, “I believe that now Russia has to draw its own ‘red lines.’ The time has come to ponder on variants of asymmetric response to the US, which are now being suggested by experts and are intended not only to offset their sanctions but also to do some retaliatory damage.”

Among such measures, the official named the deployment of tactical nukes, saying that Russia should "follow the US example and start deploying our tactical nuclear weapons in foreign countries."

While it's unclear what Gutenav meant by his citing "the US example", on a few occasions unverified accusations have emerged alleging the US and its allies like Israel have used small nuclear devices in places like Syria and Yemen, echoed also among pro-Russian sources.

Russian Federal Assembly member Vladimir Gutenev, via TASS

The nuclear "red line" warning came in Gutenev's following statement, per state-run TASS:

“It’s no secret that serious pressure is being put on Russia, and it will only get worse. It is intended to deal a blow to defense cooperation, including defense exports. We see that the Americans now speak about the possibility of sanctions against the countries that purchase Russian weaponry… We should follow the advice of certain experts, who say that Russia should possibly suspend the implementation of treaties on non-proliferation of missile technologies, and also follow the US example and start deploying our tactical nuclear weapons in foreign countries. It is possible that Syria, where we have a well-protected airbase, may become one of those countries.”

He also mentioned focusing on cryptocurrencies to circumvent “US attempts to thwart deals on Russian weaponry and civilian goods,” saying Moscow should “consider the possibility of conducting transactions in cryptocurrencies that are linked to the value of gold.”

“And I’m sure that this will be a very interesting option for China, India, and other states as well,” he said. According to Gutenev, the whole package of these measures taken together could create serious momentum in Russia's favor when dealing with the United States and its allies.

Complete map of Syrian War after Russian intervention in 2015...

“In boxing, one cannot just dodge blows, but has to strike in response, too. Especially when all the rules have been violated and the referees — such as the WTO and other international institutions — prefer to stay silent,” Gutenev explained further.

And speaking of current US sanctions target Russia's defense industry, the senior Duma official said, “The import substitution program has produced very good results, alternative suppliers have been found.” Gutenev added: “However, we are concerned about the fact that the sanctions are still gaining momentum and have become somewhat imminent.”

Such rhetoric involving the the deployment of nukes in a theater in which US and Russian forces have already had a series of near misses in terms of direct military confrontation is extremely worrisome, and signals a return to a Cold War-style of escalating scare tactics and nuclear threats.

The Russian official's words were publicized just after Bloomberg confirmed late Friday that Bolton had personally told his Russian counterpart Nikolai Patrushev that America is prepared to respond with "greater military force" than it has used against Damascus in the past, citing "information Assad may be planning a chemical attack in the northwestern province of Idlib".